[Federal Register Volume 88, Number 32 (Thursday, February 16, 2023)]
[Notices]
[Pages 10101-10103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03261]


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DEPARTMENT OF EDUCATION

[Docket ID ED-2023-OPE-0030]


Announcement of Listening Sessions

AGENCY: Office of Postsecondary Education, U.S. Department of 
Education.

ACTION: Announcement of listening sessions.

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SUMMARY: The U.S. Department of Education's (Department's) Office of 
Postsecondary Education (OPE) announces virtual listening sessions to 
receive public comments, recommendations, and suggestions to improve 
guidance on the incentive compensation prohibition under title IV of 
the Higher Education Act of 1965, as amended (HEA), particularly with 
respect to bundled services. This notice sets forth the dates and 
times, agenda, and instructions for attending and providing live 
comments at the virtual listening sessions, as well as instructions for 
submitting written comments.

DATES: The virtual listening sessions will be held on:

March 8, 2023, from 1 p.m. to 4 p.m., Eastern time
March 9, 2023, from 1 p.m. to 4 p.m., Eastern time

    The Department will accept written comments via the Federal 
eRulemaking portal until March 16, 2023. See the ADDRESSES section of 
this document for submission information.

ADDRESSES: The listening sessions will be held virtually. See the 
SUPPLEMENTARY INFORMATION section for information on how to register to 
attend or to provide live comments during a session. Written comments 
must be submitted via the Federal eRulemaking Portal at 
regulations.gov. If you require an accommodation or cannot otherwise 
submit your comments via regulations.gov, however, please contact the 
person listed under FOR FURTHER INFORMATION CONTACT. The Department 
will not accept comments submitted by fax or by email or comments 
submitted after the comment period closes. To ensure that the 
Department does not receive duplicate copies, please submit your 
comments only once. Additionally, please include the Docket ID at the 
top of your comments.
    Federal eRulemaking Portal: Please go to www.regulations.gov to 
submit your comments electronically. Information on using 
regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket, is available on the site 
under ``FAQ.''

[[Page 10102]]

    Privacy Note: The Department's policy is to make all comments 
received from members of the public available for public viewing on the 
Federal eRulemaking Portal at www.regulations.gov. Therefore, 
commenters should be careful to include in their comments only 
information that they wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: Ashley Clark, U.S. Department of 
Education. Telephone: (202) 453-7977. Email: [email protected].
    If you are deaf, hard of hearing, or have a speech disability and 
wish to access telecommunications relay services, please dial 7-1-1.

SUPPLEMENTARY INFORMATION: 
    Background: Since 1992, section 487(a)(20) of the HEA has 
prohibited institutions of higher education (institutions) from 
providing any commission, bonus, or other incentive payment to 
individuals or entities based, directly or indirectly, on success in 
securing enrollments or financial aid to any persons or entities 
engaged in any student recruiting or admission activities or in making 
decisions regarding the award of student financial assistance, subject 
to certain exceptions. In 2011, the Department issued DCL GEN-11-05 to 
provide guidance on the Department's interpretation of newly issued 
regulations (75 FR 66831) relating to the prohibition on incentive 
compensation and other title IV program integrity issues in Sec.  
668.14(b).
    As noted in that guidance, the prohibition on incentive 
compensation applies to both individuals and entities. The Department's 
guidance also sets forth examples of activities that the Department 
believes would violate the prohibition and examples of allowed 
activities. Under that guidance, direct payments to recruiters based on 
tuition generation are considered prohibited incentive compensation. 
However, in the case of a third-party entity that is not affiliated 
with the institution it serves and is not affiliated with any other 
institution that provides educational services, the guidance specifies 
that providing a set of services that includes recruitment (known as 
bundled services) does not violate the prohibition on incentive 
compensation as long as the entity does not make prohibited 
compensation payments to its employees, and the institution does not 
pay the entity separately for student recruitment services.
    Since issuing that guidance, the number of students who were 
recruited to institutions by entities operating under this bundled 
services exception has increased significantly, particularly through 
online programs operated by third-party entities, including Online 
Program Managers (OPMs). These online programs are not subject to the 
same enrollment constraints, such as physical classroom space or the 
amount of potential students in the surrounding area, as in-person 
programs. As a result, the Department is seeking to better understand 
the impact of the bundled services exception in the context of growing 
online enrollment and associated Federal student loan debt.
    The Department is currently reviewing the incentive compensation 
guidance to determine what, if any, changes to the incentive 
compensation guidance might be appropriate, particularly regarding the 
exception for bundled services. To assist in that effort and ensure the 
Department is hearing from a wide range of stakeholders, we are 
convening virtual listening sessions and accepting written public 
comment on this topic. Specifically, the Department invites comment 
from institutions, faculty, OPMs and other third-party contractors, 
scholars, advocates, and students on the following specific questions:
    1. What are the benefits and disadvantages of the current incentive 
compensation exception for bundled services for institutions and 
students?
    2. How can the Department better identify, define, and address the 
activities that may raise concerns under the current incentive 
compensation guidance?
    3. How much of an institution's spending on a bundle of services 
provided by a third-party entity is typically allocated to recruitment 
and related expenses? This will help the Department understand the 
proportion of the spending in the bundle that goes to recruitment 
versus a range of services.
    4. How has contracting with a third-party providing services under 
the bundled services exception impacted enrollment, tuition and fees, 
the types of programs offered, the modality through which programs are 
provided, student outcomes, revenues, and expenditures at institutions? 
How do these results compare to programs not supported by an OPM or 
students attending in-person at a program that is also supported by an 
OPM?
    5. How would changing third-party servicer contracts from a 
revenue-sharing model to a fee-for-service model impact the services, 
such as recruitment, currently provided to an institution under the 
bundled services exception?
    6. How do tuition and fees of programs supported by third-party 
services differ when provided under a revenue-sharing model as compared 
to a fee-for-service model?
    7. To what extent does the bundled services exception impact 
institutions' ability to create or expand online education offerings? 
To what extent would fee-for-service models impact institutions' 
ability to create or expand online education offerings?
    8. How might the Department more clearly define what it means to be 
an unaffiliated third-party for purposes of the incentive compensation 
guidance to ensure there is no affiliation between the institution and 
the entity providing services?
    9. What steps can the Department take to better ensure compliance 
with the prohibition on incentive compensation?
    Registration: Individuals who would like to present comments at the 
virtual listening sessions must register by sending an email message to 
[email protected] no later than 12:00 p.m., Eastern time, on the 
business day prior to the listening session at which they want to 
speak. The message should include the name of the speaker, the email 
address of the speaker, and one or more dates and times during which 
the individual would be available to speak. We will attempt to 
accommodate each speaker's preference for date and time; however, if we 
are unable to do so, we will make the determination on a first-come, 
first-served basis, based on the time and date we received the message. 
We will limit each participant's comments to 3 minutes.
    The Department will notify speakers of their reserved time slot and 
provide information on how to log in to the session as a speaker. An 
individual may make only one presentation at the listening sessions. If 
we receive more registrations than we can accommodate, the Department 
reserves the right to reject the registration of an entity or 
individual affiliated with an entity already scheduled to present 
comments, to ensure that a broad range of entities and individuals are 
able to present. Speakers will access the meetings through a link 
separate from those who wish to listen to the sessions.
    Individuals who want to observe the listening sessions, but who do 
not want to present comments, also are required to register. We will 
post registration links for attendees who wish to observe on our 
website at: www2.ed.gov/about/offices/list/ope/policy.html. There will 
be a unique link each day for attendees who wish to observe. Non-
speaking

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attendees will be muted for the duration of each listening session.
    Reasonable Accommodations: The sessions will be accessible to 
individuals with disabilities. If you will need an auxiliary aid or 
service to attend or to provide a live comment, please notify the 
person listed under FOR FURTHER INFORMATION CONTACT at least 1 week 
before the scheduled meeting date. Although we will attempt to meet a 
request received after that date, we may not be able to make available 
the requested auxiliary aid or service because of insufficient time to 
arrange it. Further information about requesting auxiliary aids and 
services will be available during the session registration process. To 
provide written comments, see the ADDRESSES section above.
    Accessible Format: On request to the program contact person listed 
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities 
can obtain this document in an accessible format. The Department will 
provide the requestor with an accessible format that may include Rich 
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, 
braille, large print, audiotape, or compact disc, or other accessible 
format.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. You may 
access the official edition of the Federal Register and the Code of 
Federal Regulations at www.govinfo.gov. At this site you can view this 
document, as well as all other documents of this Department published 
in the Federal Register, in text or Adobe Portable Document Format 
(PDF). To use PDF, you must have Adobe Acrobat Reader, which is 
available free at the site.
    You also may access documents of the Department published in the 
Federal Register by using the article search feature at 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.

Nasser Paydar,
Assistant Secretary for Postsecondary Education.
[FR Doc. 2023-03261 Filed 2-15-23; 8:45 am]
BILLING CODE 4000-01-P